Cottonwood I 205 Plan

Rockford, MN 55373

$86,900B

3 bd · 2.0 ba · 1,344 sqft · Built — · Manufactured · Active · 386 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,550/mo
• Mortgage (P&I): −$456
• Tax + insurance: −$145
• HOA: −$0
• Vac / Maint / Mgmt: −$326
• Net cashflow: $624/mo
• Annual: $7,487/yr
• Cap rate: 14.91%
• Cash-on-cash: 30.77%
• DSCR: 2.37
• 1% rule: 1.78%
• Cash to close: $24,332

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $87k. Condition is rated good.
• At list price, monthly cash flow is $624 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $87k).
• It's been on market 386 days — a 12% lower offer ($76k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $76k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $601 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#487 in MN) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A, employment A; Watch: amenities F, commute F, health & safety F.
• Rockford Public School District (rural): math 42% / reading 58% proficiency, ranked #88 of 301 in MN (top 29%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 59 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 14.9% vs local median 2.7% in Rockford — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 386 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.